Super Micro Falls About 11% on Report That Prosecutors Are Probing Alice Huang-Linked Firms Over Server Smuggling to China

SMCI shares fell on Thursday, November 12, after Bloomberg reported that federal prosecutors in Manhattan are investigating whether entities linked to Alice Huang helped smuggle Super Micro products to China. The stock was down about 5% by late morning, retracing part of Wednesday's roughly 10% gain, and the decline deepened through the afternoon to about 11%, at $27.05, according to Benzinga via TradingView.

Alice Huang is a former top executive at Megaspeed, a company the Justice Department is separately examining and which denies wrongdoing (Fortune). U.S. officials suspect her of gathering information for Beijing, and Fortune notes reports that she and former NVDA CEO Jensen Huang had an affair; Huang resigned from Nvidia on November 12. According to the reporting, it is unclear whether the new inquiry is connected to existing chip-smuggling cases. Super Micro has said it did not sell products to Megaspeed.

The report lands on top of an earlier case. In March, Super Micro co-founder Yih-Shyan "Wally" Liaw and two others were charged with conspiring to divert roughly $2.5 billion of Nvidia-powered servers to China (The Register). Liaw has pleaded not guilty and left the company; Super Micro is not a defendant and says it is cooperating with authorities.

The legal overhang contrasts with strong recent results: on November 3, Super Micro reported fiscal first-quarter 2027 net sales of $19.9 billion, up from $11.1 billion in the prior quarter. Investors will watch for any filing or subpoena that names the company directly, and for signs that export-control scrutiny affects shipments of AI servers to its largest customers.